Tuesday, February 15, 2005

Yes, the art market will leave Britain

I have a strong sense of déjà vue about the travails of the art market in the wake of the introduction of droit de suite. I first wrote about it about ten years ago, when the legislation was being discussed and the British Government swore blind that it would protect the flourishing British art market.

Since the measure was being introduced under the all-embracing aura of the Single Market it was voted through on QMV and the British Government was left with little on its hands. So much for how much power or influence we can have.

Well, the droit de suite is here with us or, at least, partly so, the second tranche being due in 2012. (If we are really unlucky we shall lose vast amounts of money as well as thousands of visitors because of the wretched Olympic Games just about the time we shall be losing vast amounts of money and thousands of well-heeled and free-spending visitors because the modern art market will have finally disappeared from these shores. Good planning.)

It is not just Britain that will suffer. The European Fine Art Foundation, which runs the world’s most important art fair, coincidentally, in Maastricht has commissioned and independent team of researchers and their report is gloomy reading.

According to Will Bennett, the Art Sales Correspondent of the Daily Telegraph, the report points to the fact that the modern and contemporary art market has been performing exceptionally well in Britain in the last four years.

But the introduction of the droit de suite, a sliding scale levy paid by the vendor of a work of art to a living artist or to an artist’s family for 70 years after death, 80 per cent of which is likely to go to descendants of artists like Picasso, Matisse or Soutine, none of whom are exactly on the breadline, will drive the business to the US and Switzerland.

The report says:

"The more valuable a painting becomes, the more likely it is that the owner will sell in a marketplace that does not charge droit de suite."

Evidence is not far to seek. France has already introduced the droit de suite. That is thought to be the reason for the auction of Belgian businessman René Gaffé’s collection in 2001, thought to have been secured by French auctioneers, eventually taking place in New York. It went for £50 million.

In the first place droit de suite will be levied on work of living artists. From 2012 it will extend to work of artists who have died within the last 70 years. This category will include a very large amount of high priced art.

The British Art Market Foundation has accepted that the first tranche of this harmful legislation is going through (there is not much else they can do, I suppose) but intend to fight against the second one.

How do they propose to do that, one wonders. Once EU legislation has been agreed on, a member state is legally bound to implement it. Will these people never learn?

One aspect of this sorry tale is rarely mentioned. Sotheby’s and Christie’s will simply transfer their operations to New York and have, no doubt, been planning to do so for a while. But what will happen to the presently flourishing smaller art galleries and auction houses? They, too, bring in a great deal of income, employ people, pay taxes, add to the country’s economy. They will not be able to relocate.